Senator Elizabeth Warren Will Help You Plan Your F*ck-Off Fund

Five minutes into a conversation with Senator Elizabeth Warren (D–Mass.), it becomes obvious—your bank statements will never be the same. More than her peers on Capitol Hill or any Silicon Valley startup, Warren is on a mission to get young women excited about personal finance. An expert on domestic economic policies, the progressive icon from Massachusetts has no trouble making her case.

"Women are the main breadwinners or joint breadwinners in two-thirds of the families in America," Warren points out, so they need to know how to spend money wisely—and when to save it. Warren started to sort out these issues more than three decades ago, examining the impact of financial legalese on American families. But no matter the bottom line, her research has made her few friends.

"In a male-dominated world of law and an even more male-dominated world of Wall Street, talk about what was happening to families was the 'girly' side of economics," she remembers. "So long as the stock market was soaring and the big banks were making record profits, what was happening to working families didn't matter much."

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As millions of Americans try to rebuild their lives after the financial crisis, Warren wants to spread the good word that "finance—not just in your checking account and your savings account, but finance across this country—matters to every single one of us."

Warren has always liked numbers, but she would have had to master balance and budgets, anyway. "Poverty taught me," she says, candidly. "It was the school of hard knocks." And Warren learned fast. When she was 12, her father suffered a heart attack that forced him to leave his job. Her mother went to work at a local Sears to keep them solvent. "The bottom just fell out for us," she said on The Late Show with David Letterman in 2014. "The bills piled up."

Warren never wanted to be in such a precarious position. I tell her about a just-gone-viral manifesto that emphasizes the value of financial freedom for young women. "The Fuck-Off Fund," I explain, and she laughs. "I mean, this is interesting," she says. And then she pauses: she had her very own.

"I got married when I was 19, and my mother-in-law took me aside and said, 'You always need walking-out-the-door money,'" Warren remembers. "It was a pretty remarkable thing to say back then, particularly to the woman her son had just married." She set aside what modest sums she could. A decade later, she cashed in, at 29, when Warren got divorced. With two children to care for, she ended up on her own. "It mattered to have those savings," she says. "When any hard hit comes—whether it's divorce, a medical problem, someone in your family has an emergency—having savings means there are options. Having debt means you're already flat against the wall, and now it's just going to get harder."

"Life is not about money, but money helps us have independence," Warren says. "Women need to be independent of everyone else, to have something they can hold onto for themselves. That means some money—some money in savings and some ability to earn, and that's true for everyone. Period."

Everyone needs a Fuck-Off Fund, I conclude.

"Walking-out Money," she deems it. "But, yes, there are a lot of different synonyms for it."

"We don't know what's around the next corner," Warren says. "It's easy to walk fast with your head held high when you know that there's a little money to back you up if something goes on." When she thinks about the millions of college graduates who have no such option, who are too mired in debt to save for the future, she turns zealous.

"When I was young, there was no money in my family for college, but I graduated from a commuter college that cost $50 a semester," Warren says. "I got a first-rate education at a state university, and I could do that back then because I grew up in an America that was investing in young people. Today, that option is just not available. So for anyone born into a family that can't afford to write a check to put them through school, debt is the only option. Then, to make it worse, a generation ago, the federal government subsidized student loans. That means that the government was putting money on the table. Students were able to borrow money at less than the cost of that student loan. But today, the federal government is making a profit off of the backs of young people trying to get an education."

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Warren is on a roll now. "For the loans created between 2007 and 2012, the federal government is currently on target to make $66 billion in profits," Warren exclaims. "That is obscene."

"This is about women's economic issues," she continues. "Young women are doing exactly what we told them to do. They worked hard, played by the rules, and now they're attending college at higher rates than men. But the cost of college is going through the roof." Warren tells me that 70 percent of students have to borrow money to make it to graduation. And once women enter the workforce, the disadvantages mount. Women still make only 78 cents for every dollar that a man earns. Warren drills down: "According to the best data available, women are paid less in 305 out of 314 major occupations." That is, men make more than women do in 97 percent of job categories.

Compounded by the fact that mothers are 10 times more likely than fathers to take off time when children are sick and that almost 60 percent of workers are not paid for that time off, the burden becomes enormous. Women are "stuck having to choose between work and caring for someone they love." Access to healthcare and paid leave and student debt—these issues and the inadequate policies that have been on the books until now all have unique consequences for women.

"Women must care about this," she goes on. "If half the population looks the other way, then the chances that we'll ever bring Wall Street and Congress under some kind of accountability just goes way down."

"Women must care about this."

Ever practical, Warren is not about to advise all young women to take on the banks or dismantle the U.S. government. But she is going to make some recommendations: Read the newspaper. Write to your representatives. Realize the stakes in this election. Know the numbers on your paycheck. Understand what you earn and what you're worth. And memorize these rules—Elizabeth Warren wrote them just for you:

Stay out of debt. Sometimes debt is necessary—to buy a home or get an education—but not to buy a sweater or to eat out. If you have a choice between buying something and paying down your credit card, pay down your credit card. My mother said that if you don't have the cash, don't buy it. She was right.

Get your money in balance. One rule of thumb is 50/30/20: Spend about 50 percent of your money on Must-Haves (like rent and car payments) and about 30 percent on Wants, while 20 percent should go toward Savings and paying down debt. This will help build a stable foundation to pay the bills, to have a little fun, and to put something aside for the future.

Goals work. Someone who decides to pay down their debts should pick just one debt, if possible, and put every new dime earned on paying down that one debt. Only once that debt is paid off, it's time to start paying down the next debt. Pretty soon, it's time to move from paying debts to building savings.

Count dollars, not pennies. Look at big-ticket items in your budget: your home or apartment, your car, your insurance. If you are overspending on these big monthly bills, then money is draining out of your pocket a lot faster than you can replace just by clipping coupons or buying cheaper coffee.

Check out CFPB.gov. This is the new consumer agency, and they have great information, helpful advice, along with important warnings. If you hit a problem with a bank or lender, the CFPB has a complaint website that helps get problems solved and (sometimes) money back. Here's government that works!

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